Pacific Products, Inc. v. Great Western Plywood, Ltd.

• Decision Date: 05 September 1975
• Docket Number: No. 17634,17634
• Citation: 528 S.W.2d 286
• Court: Texas Court of Appeals
• Parties: PACIFIC PRODUCTS, INC., Appellant, v. GREAT WESTERN PLYWOOD, LTD., Appellee.

Page 286

528 S.W.2d 286

PACIFIC PRODUCTS, INC., Appellant, v. GREAT WESTERN PLYWOOD, LTD., Appellee.

No. 17634.

Court of Civil Appeals of Texas Fort Worth.

Sept. 5, 1975.

Rehearing Denied Oct. 3, 1975.

Bagby, McGahey, Ross & DeVore, Inc., and Terry B. Arnn, Arlington, for appellant.

Brown, Herman, Scott, Dean & Miles, and J. Shelby Sharpe, Fort Worth, for appellee.

OPINION

SPURLOCK, Justice.

This is an appeal from a judgment against appellant Pacific Products, Inc., in the amount of $11,528.17 awarded after a trial before the court without jury. That sum of money represents the difference in the contract price for a railway carload of plywood ordered by Pacific and the price at which the seller, Great Western, was ultimately able to dispose of same, plus incidental expenses.

We affirm the judgment.

Appellee, Great Western, of Portland, Oregon, was a primary wholesaler of plywood products milled in the Pacific Northwest (now in receivership); appellant, Pacific Products, Inc., is a wholesaler of lumber located in Arlington, Texas. At some time during March or the first few days in April of 1973, long distance phone conversations were held between Roger Bunge, an agent of Great Western and one of Pacific's salesmen, Craig Stephens, with regard to the purchase by Pacific of a railway carload of plywood for one of its local customers, Bush Lumber Company.

As a result, on the 4th or 5th of April, Pacific forwarded a purchase order and Great Western sent a written acknowledgment; these crossed in the mail. The order form from Pacific was of a standard format and provided that 'All purchases are made in accordance with applicable association* Grading Rules and practices, unless stated otherwise'; the typewritten terms provided for an order of:

1 C/L 3/8 AC-BC TECO GS 5% SHOP

AC 296.00

BC 293.00

SHOP 251.60

These provisions reflect an order of one carload of 3/8 inch plywood composed of AC, BC and 'Shop' grades of quality, with the quantity of shop grade to be no more than 5% Of the total; AC is the best grade of these three and shop the lowest; 'TECO GS' means the plywood will bear the grade stamp of Timber Engineering Company, one of several quality control organizations within the industry; the figures 296.00, etc., reflect the cost per thousand feet of the indicated grade. It is admitted that neither this document nor the acknowledgment specifies any particular quantity of grades AC and BC, whether by unit or percentage. The purchase order also provided the railcar would be delivered to the switching yard of the St. Louis Southwestern Railway (SSW) in Addison, Texas, near Dallas; it was signed and returned by Stephens.

The acknowledgment from Great Western lacked the proviso regarding association standards and provided TECO Grade Stamped Plywood

PS 1--66 Group I

AC/BC Shop developing

1 C/L (30--36U) 3/8 48 96

172 list

This document also provided the carload was to be shipped to Pacific at the SSW yard in Addison.

In addition to the applicable explanations mentioned above, it is uncontroverted that '30--36U' reflects 30 or 36 units, there being eighty 48 96 sheets to a unit, and railcars hold either 30 or 36 units depending on the size of the car.

The shipment was made on May 3rd and Pacific received an invoice on May 11th, a Friday, which reflected for the first time the respective quantities of each grade, the total price for each quantity, and the total price for the entire order of $22,109.39, less $1,353.96 freight ($20,755.43). Prior to the receipt of the invoice, Pacific had given the railroad a written authorization to release the car to its customer on arrival, and after arrival on Monday (May 14th) it was switched to the customer's siding. In the meantime, the customer had been forwarded a copy of the invoice and it called Pacific on Monday claiming the shipment was not sufficient for its needs as the invoice showed far too much plywood of the BC grade. It is also unquestioned that the price of plywood had begun to fall rapidly prior to the arrival of the shipment.

The next day, May 15th, the car was opened and inspected by the customer in the presence of Pacific's agent and an observer from Great Western. The parties opened only one of the 30 units in the car and after examination the customer first and then Pacific declared the car to be refused; the next day Pacific gave Great Western written notice of rejection.

Great Western then asked for a 'reinspection' by a disinterested quality control firm pursuant to Section A2 of the appendix to U.S. Product Standard PS 1--66, which provides in part:

A2. Shipment Reinspection Practices--Based on industry practices, the following information on reinspection of plywood shipments is offered purchasers of plywood:

All complaints regarding the quality of any shipment must be made within 15 days from receipt.

(a) If the grade of any plywood shipment is in dispute and a reinspection is demanded, the cost of such reinspection shall be borne by the seller if the shipment is more than 5% Below grade, and the shipment shall be settled on the basis of the reinspection report.

The buyer need not accept those panels established as below grade, but shall accept the balance of the shipment as invoiced.

(b) If reinspection establishes the shipment to be 5% Or less below grade, the buyer pays the cost of reinspection and pays for the shipment as invoiced.

The reinspection was done by a representative of Timber Engineering Company and in his report of June 7th he found the shipment to be in compliance with the 'standard', even though it contained approximately 85% BC grade, since it had five percent (5%) or less of plywood below the grades ordered. Pacific still refused to accept the shipment and Great Western sold it some six months later at a dramatic loss. Subsequently, Great Western brought this suit and Pacific has appealed from the judgment of the trial court in favor of the former.

We will first consider Pacific's third point of error, by which it contends the trial court erred in striking the defense of fraud because same was filed in a timely manner and was properly before the court.

On the morning of trial, October 28, 1974, a hearing was to be held on Great Western's exceptions to the defendant's second amended original answer including a pleading which maintained that the agent of Great Western had verbally represented to Pacific's salesman that the shipment in question would 'contain 5% Shop, 5--10% BC grade, and the remaining portion of the carload would be AC grade,' and that Pacific had relied on such representation to its detriment. When the hearing began, however, Pacific announced it had just filed its third amended original answer, changing the before-mentioned pleading to one of fraud rather than 'representation'. The trial court then sustained Great Western's exception to this pleading on the basis of surprise and it is of this action which Pacific now complains.

Rule 63, T.R.C.P., provides: 'Parties may amend their pleadings, . . . by filing such pleas with the clerk at such time as not to operate as a surprise to the opposite party; provided, that any amendment offered for filing within seven days of the date of trial. . . shall be filed only after leave of the judge is obtained, which leave shall be granted by the judge unless there is a showing that such amendment will operate as a surprise to the opposite party.'

It is Pacific's contention that the plaintiff was not surprised by the defense of fraud pleaded on the morning of trial. It makes the statement that it had pleaded the question of representation in each of its answers prior to the third amended answer and the pleading of fraud was no more than an amplification of a prior pleading which was tendered to meet exceptions and to which it was entitled as a matter of law.

Under Rule 63, the trial court has great latitude in deciding whether or not to allow an amendment of pleadings within seven days of trial and his ruling will not be disturbed on appeal unless the complaining party makes a clear showing that the court abused its discretion. Badgett v. Erspan, 476 S.W.2d 381 (Fort Worth, Tex.Civ.App., 1972, no writ hist.). The burden of demonstrating that the trial court erred in refusing to permit a late filing of an amended pleading or trial amendment rests on the party contending such action was not justified by the rules, and the mere fact that the court refused to permit amendment is not sufficient. Herrin Transportation Co. v. Parker, 425 S.W.2d 876 (Houston, Tex.Civ.App., 1st Dist., 1968, writ ref., n.r.e.).

In this case, we note almost one year elapsed from the filing of defendant's initial answer to the day of trial and during that period Pacific amended its answer twice without mentioning fraud on the part of plaintiff as a defense; the record reflects that Great Western had gone to considerable expense in bringing witnesses from out of state in order to be prepared for the trial to begin as scheduled; Great Western complained vigorously of surprise and claimed the unanticipated defense of fraud would compromise its efforts on behalf of its client. On the basis of the record, we cannot say the trial court abused its discretion in refusing to allow Pacific to further amend its pleadings on the day of trial.

The third point to error is overruled.

Pacific's first point of error claims the trial court erred in holding that the exchange of the purchase order from Pacific and the written acknowledgment from Great Western constituted a contract between the parties because such were not sufficiently certain to be enforced, as a matter of law. More specifically, it contends that one cannot determine from the purchase order and acknowledgment the number of units of each grade, price for the total quantity of each grade, total quantity of plywood, or the final total price, and therefore the purported contract must fail due to the lack of expressed agreement as to...